If a CFA charterholder receives a referral fee, he must: A) disclose the nature of the fee arrangement to the client before entering into a formal agreement. B) disclose the nature of the fee arrangement to the client only if any service is actually performed. C) disclose the fee to the supervisor, in written form, as an additional benefit. D) consult with the firm’s compliance officer, and follow his or her instructions concerning disclosure. Answer…down below. Your answer: D was incorrect. The correct answer was A) disclose the nature of the fee arrangement to the client before entering into a formal agreement. According to Standard VI©, the nature as well as the value of the fee must be disclosed to the client before entering into a formal agreement. The compliance officer and/or the employee’s supervisor should be contacted for consultation. I thought A at first, but then hesitated because C and D seemed somewhat similiar to A - disclosing referral fees all around the board. I eventually chose D because the compliance officer would be able to give me perhaps stricter protocal to disclosing referral fees. Next time should I only worry about it from the clients point of view? Thanks.
Also, since I have your attention. Could one consider a patriotic statement as a potential threat to an analysts’ Independence and Objectivity…? or have I been doing too much ethics… good luck gang